From Zacks: New Consumer Price Index (CPI) numbers were just released this morning, following the Producer Price Index (PPI) that hit the tape last week.
These metrics track economic inflation in the U.S. based on how companies are pricing their offerings compared with how much customers are willing to pay for them. The CPI headline for the month of October reached 0.3%, exactly in-line with expectations, but just half last week’s PPI number of 0.6% for last month.
Stripping out volatile food and energy prices, we see this figure adjust to 0.2%, again as expected. Another in-line headline was the 2.5% year over year, 2/10 hotter than the September read. Core year over year came to 2.1%, a tenth behind analyst expectations. Keeping closely aligned with the 2% benchmark will be pleasing news to Fed participants deciding on interest rates, though not likely enough to keep the Fed from raising rates again at its December meeting.
PPI final demand came in at 2.9% for October when results were posted last week (ex-energy 2.6%). This represents a willingness for producers to inflate pricing higher than consumers are willing to spend at this point, but we’re not looking at any sort of major chasm here. In fact, the last time we reached 3% on CPI numbers was way back in 2011; these metrics have been in relative alignment most of the time since then.
Retailers Report Ahead of Black Friday
With “Black Friday” circled on the calendars for a week from this Friday, indicating the informal issuance of a new holiday shopping season, earnings reports for major retailers continue to come out this morning. And for those fans of films like “Miracle on 34th Street,” holiday shopping is very nearly synonymous with Macy’s Inc. M. The Zacks Rank #2 (Buy)-rated big-box retailer posted a big beat on its bottom line for Q3: 27 cents per share versus the expected 14 cents.
Revenues of $5.4 billion in the quarter were roughly in-line with expectations, as well as an improvement over the year-ago top-line of $5.28 billion. This marks the second quarter of the last four where Macy’s has improved on revenue expectations, and the sixth-straight earnings beat. Comps were up 3.3% in the quarter, marking four straight quarterly beats.
Shares of Macy’s are up 42% year to date and a whopping 87.8% year over year. The company said this morning the company is “going into Q4 with momentum,” which is good news for stock holders. Currently, shares are trading up 1.25% in the early market.
Canada Goose GOOS also surpassed expectations this morning, posting 35 cents per share compared to the 19 cents in the Zacks consensus. Revenues of $176.22 million amounted to a 17% positive surprise for the Zacks Rank #3 (Hold)-rated specialty retailer. Shares are up 12.8% in pre-market trading, following a terrific 85.6% year-to-date climb in an otherwise rough 2018.
The SPDR S&P Retail ETF (XRT) was trading at $48.22 per share on Wednesday morning, up $0.05 (+0.10%). Year-to-date, XRT has gained 7.03%, versus a 1.83% rise in the benchmark S&P 500 index during the same period.
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